Do I have to keep wallet running for POS to work?
Atm I have it encrypted and the wallet NOT running. If I were to come back to it in 20 days & use walletpassphrase to unlock would the POS still work??
yes, as long as you run your wallet unlocked at some point after accumulating 20 coin-days you will generate a PoS block, this will make your balance unavailable until that block is confirmed, 30 minutes i believe.